Defying the Odds on Arkansas Medical News Inc.

Defying the Odds

By: LYNNE JETER

Taylor Wilson

Despite Obstacles, Physician Hospital Being Built in Conway

Even though plans for many physician-owned hospitals in development are being dropped across the United States, Dallas, Texas-based Cirrus Health is continuing with plans to develop a physician hospital in Conway. Medical News of Arkansas spoke with Cirrus Health COO Taylor Wilson to learn more about the benchmark project.

The New Conway Hospital

The 130,000-square-foot Central Heart and Surgical Hospital will house a medical office building, eight operating suites, three procedure rooms, six intensive care units, 25 medical/surgical beds, and 24 cardiac universal beds.
Service lines will include cardiology, cardiovascular surgery, general surgery, gastroenterology, gynecology, orthopedics, ophthalmology, otolaryngology (ENT), pain management, podiatry, spine, urology and vascular.
Other services will include imaging (MRI, CT, ultrasound, flat plane, and fluoroscopy), a sleep center, physical therapy, and a 6-bed emergency room.

SOURCE: Cirrus Health.

What is the status of your Arkansas project in development?

Central Heart and Surgical Hospital is the vision of local Conway physicians to provide additional access to medical services to the residents of Conway and those going to Little Rock for surgical care. The hospital has been in development for some time, and despite an economic downturn and continued anti-physician-ownership language in legislation, physicians and Cirrus Health continue to move forward with the development of the acute care hospital. In an effort to show continued support, Cirrus Health has recruited two additional physicians who are already serving the residents of Conway.

Cirrus Health understands the commitment of the physicians to bring this hospital to their community. Cirrus continues to stand with these outstanding physicians to work through the economic challenges facing our nation and the continued efforts Congress attempts to ban physicians’ rights to own hospitals.

The site has already been determined and the land has been purchased. The hospital will be located on approximately 11 acres near Interstate 40, on the southwest corner of Exchange Avenue and United Drive. In collaboration with physicians, preliminary architectural drawings have been completed. Cirrus is in the process of securing construction financing. Once the financing is in place, Cirrus anticipates an 18-month construction timeline.

Overcoming Hurdles

Because of the push toward anti-physician-ownership language in proposed federal legislation, many physician-owned hospital expansion projects are being dropped.

Arkansas Surgical Hospital in Maumelle halted plans to add two operating rooms and 10 new beds, while Physicians’ Specialty Hospital in Fayetteville has an unfinished third floor.

Russ Greene, RN, CEO of Physicians’ Specialty Hospital, said the leadership team will not be able to finish patient rooms if the effective date in proposed healthcare reform legislation remains the same.

“We’re moving ahead with design documents in case the bill doesn’t pass or is changed,” said Greene. To minimize any negative impact that might result, “we’ve considered not accepting Medicare patients, like the Mayo Clinic.”

Physician-owned hospital administrators have sharply criticized the Obama Administration’s agenda of “trying to force a two-tier healthcare system—one for the rich and one for the poor,” explained Greene.

“We’re prepared to treat the rich,” he pointed out, “while the hospitals that are trying to affect our business will be caring for the poor.”

What is the anticipated staff size?

Central Heart and Surgical Hospital is currently projecting by Year 2 of operations, approximately 186 total FTE clinical and support members will be on staff.

What is the difference in the set-up between physician-owned hospitals and physician hospitals?

Physician-ownership most commonly refers to physicians having a direct ownership in the operations of the hospital. This allows physicians to maintain direct and better oversight of the care their patients receive.

Congress continues to try and ban physicians from having ownership in hospitals operations, even though numerous reports, including HealthGrades and Centers for Medicare and Medicaid Services (CMS), validate physician-owned facilities as providing strong clinical outcomes and performing at higher overall patient satisfaction. A recent report (August 2009) released by Consumer Reports, ranked physician hospitals as the number one hospital in 19 states, and near the top in the others states in which they operate.

Each hospital operated by Cirrus Health, in partnership with physicians, ranked in the top 10 of their respective states in overall patient satisfaction according to the Center for Medicare and Medicaid Center’s data. This is a testament to the strength of working in partnership with physicians to provide the highest level of clinical care to patients possible.

In 2008 alone, Congress made six attempts to add anti-physician ownership language to legislation. In 2009, language was written into the healthcare reform legislation that would have banned future physician-ownership of hospitals, halted the development of current physician-owned hospitals, and prohibited the expansion of current hospitals. There are currently 235 hospitals in 35 states that have physician ownership and they employ more than 65,000 people with a total payroll of over $3 billion. Currently, there are 124 hospitals under development in 22 states and would provide jobs for nearly 25,000 individuals. The hospitals pay more than $660 million in taxes and generate additional economic activity exceeding $3.5 billion. The total charity care provided by each hospital every year averages 5.3 percent of total revenue.

Cirrus Health anticipates that physician ownership will be modified from its current structure through some legislative action; however, our strategy is to continue partnering with physicians in a legislative compliant model. Cirrus Health will continue to develop physician hospitals with significant input by physicians into clinical operations whether they have ownership in the clinical operations or not.

Cirrus Health appreciates the value physicians bring to the development of patient care centered hospitals. We’ll continue to work closely with physicians to maintain their control over the level of care provide to the patients who entrust them with their care.

Some physician-owned hospitals have talked about the inequity of Medicare reimbursements. Is Cirrus Health experiencing those problems?

Like all hospitals, physician-owned hospitals struggle with the reimbursement from Medicare and many other government payors because it often falls short of the cost of providing care. Central Heart and Surgical Hospital will be licensed as an acute hospital like most of the other hospitals in the state, and will be subject to the same reimbursement from Medicare as our neighboring hospitals. We do not anticipate qualifying for any additional Medicare reimbursement that is typically provided to those hospitals that provide care in rural or critical access areas of the state.